Quick Steps to File Income Tax Return

Preparing your tax returns can feel a cumbersome job but it can be empowering and rewarding. Filing your taxes isn’t hard, it just takes patience to make sure you’ve done it correctly. You can delegate this task of yours to a Chartered Accountant, Tax Return Preparer or an online tax expert site and concentrate on minting money or you can try your own skill and file it by following a few easy steps enlisted below:

STEP 1 : CHECK YOUR TDS DETAILS

Before you file your return check whether the tax you have paid during the year on different sources of income has been correctly credited in your account. You need to check your FORM 26AS that contains details of tax paid by an individual. Any TDS deducted or Self Assessment tax you paid will appear in this form. If you have interest income, rental income etc the payer must have deducted your TDS. Make sure you have quoted your PAN No. correctly to the deductor.

You can access the Form 26AS/Tax credit Statement on the Income Tax Department e-filing portal (http://incometaxindiaefiling.gov.in) . Click on ‘Check Tax Credit Statement’ and you will be directed to the relevant page. First time users will have to get themselves registered before they can log in and access the statement.

If there is any mismatch in the details, you need to bring this into the attention of the deductor and get it corrected before filing your return. Since all the details can be accessed online these days by the I.T.Department so do not try and under report your income.

STEP 2 : CHOOSE THE RIGHT FORM

The form in which ITR is to be filed is very important .If you file the return in wrong form, the return may get rejected.

Given below are the ITR forms and the category of persons who can file under the suitable forms as per their applicability.

ITR 1 (SAHAJ)

For taxpayers with income :

Salary or Pension

Rental Income from one house

Income from interest

Don’t use it if :

The exempt income during the year exceeds Rs.5000.00

If you have any asset in a foreign country.

Other sources of income include earnings from lottery and horse racing.

You are claiming tax benefit under a foreign treaty.

You have incurred loss under income from other sources.

ITR 2

For individuals and HUFs with income from :

Income from salary or pension.

Rental income from more than one property.

Capital gains.

Income from interest and other sources including from lottery winnings and race horses.

Don’t use if :

The taxpayer has income from business or profession.

ITR 3

For partners in firms with income from :

Interest, salary, bonus, commission, or remuneration.

Capital gains.

Rental income from one or more house or brought forward losses.

Income from other sources including winning from lottery and income from horse races.

Don’t use it if :

The firm is a sole proprietorship business.

ITR 4

For taxpayers with income from :

Proprietary business.

Profession(doctor,lawyer)

Commission

ITR 4S (SUGAM)

For taxpayers with income from :

Business turnover less than 1crore.

Businesses are covered under presumptive taxation rules.

Don’t use it if :

You are self employed professional(doctor,lawyer etc)

You want to report income which is less than 8% of the turnover of your business.

You have made capital gains.

You have income from speculative business.

Your income includes winnings from lottery or horse racing.

ITR V

To be used by all taxpayers:

This is the acknowledgement form and is used by all taxpayers. If you file physical returns, you have to submit this form along with the relevant ITR. If you e-file without a digital signature, you have to send the signed ITR V to the CPC in Bengaluru by ordinary post within 120 days.

NOTE:

Till the signed ITR V reaches the CPC, your return will not be considered complete.

STEP 3 : LATEST AMENDMENTS

New Tax Reliefs:

In ITR-1, a new box has been inserted for claiming deduction u/s 80EE that is available to 1st time Home buyers. If you have taken a Housing Loan during 1st April 2013 to 31st March 2014,you can claim an additional deduction of 100,000.00 on Housing Loan Interest paid. Only sanctioned loan amount less than Rs. 25,00,000.00 shall be eligible for this tax benefit and value of self occupied house should not exceed Rs.40,00,000.00.

Housing loan:

On selling of a property after 3 years, deduction on Capital Gains can be claimed by using the amount to buy another house or by investing in bonds issued by NHAI/REC .

Refunds:

The Income Tax Department no longer sends refunds through cheques. The refund amount is directly credited in your Bank A/c through ECS. So make sure you enter the bank A/c and Branch Code details correctly.

Section 80TTA :

The new section gives you a deduction of up to Rs. 10,000.00 on saving bank A/c interest. Term Deposits interest are still taxable.

STEP 4 : DISCLOSE YOUR TAX-FREE/EXEMPT INCOME

Income such as Dividend Received on Mutual Funds, Income from PPF etc is exempt from tax. However tax laws require you to disclose the same in your returns even though you do not have to pay any tax on them.

STEP 5: ANNUAL INFORMATION RETURN

While filing Income Tax Return it is essential to disclose any significant investments made during the year, transaction of immovable property, cash deposits and credit card expenses exceeding certain threshold limits. Banks, MFs etc databases are linked with IT Departments and information is shared.

STEP 6 : FILE RETURN ON TIME

You lose benefits of carrying forward of losses to future years, rectification of mistakes in returns if you file the return after due date. Therefore it is highly recommended to file returns within stipulated time frame and avoid the last minute rush.